REAE 3325 Ch 8 Questions and Answers (Graded A)REAE 3325 Ch 8 Questions and Answers (Graded A)REAE 3325 Ch 8 Questions and Answers (Graded A)REAE 3325 Ch 8 Questions and Answers (Graded A)
The use of comparable property sales information and their respective 1st year NOI to calculate the overall c...
The use of comparable property sales information and their respective 1st year NOI to
calculate the overall capitalization rate is called the - ANSWER-direct market extraction
method
Which of the following would NOT be considered a capital expenditure - ANSWER-
changing the locks for a new tenant
A property is under long-term leases to financially reliable tenants at below-market
rents. The appraiser of this property would estimate the PGI based on - ANSWER-the
actual contract rents
An appraiser may determine the value of small income-producing properties by using a
variant of the direct income capitalization method known as the ____________ approa -
ANSWER-income multiplier
If capital expenditures are subtracted from revenues to determine the NOI, the
treatment of the CAPX is said to be - ANSWER-above-line
sequence of adjustments matters when - ANSWER-percentage adjustments are
involved
sequence of adjustments does not matter when - ANSWER-all adjustments are in dollar
amounts
An income property is for sale for $750,000. What is the minimum NOI required to justify
that price if the required cap rate for an investor is 9% - ANSWER-Given the sale price
and required cap rate, we can solve for the minimum NOI by multiplying the price by the
required cap rate. $750,000 x 9% = $67,500.
In sequence of adjustment what is the second adjustment to consider? - ANSWER-
Market Condition
In sequence of adjustment what are the last 3 adjustment to consider? - ANSWER-
Location, physical character, non reality items
The annual property taxes on an income property are considered a _______ expense -
ANSWER-fixed
The overall capitalization rate is also known as the - ANSWER-going-in cap rate
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